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2. Why is innovation necessary?
Western businesses can no longer guarantee to compete on a world stage on price
alone. The costs of doing business, especially in a manufacturing sector, are far greater
than those in Eastern Europe and in the Far East. In terms of economies of scale, which
for decades was a differentiating factor for many businesses, the BRIC nations (Brazil,
Russia, India, China) possess internal markets far greater than the UK. The lowering
costs of transportation and better communication mean that these nations can move into
our market places with increased ease.
“If you can’t compete on price you have to
differentiate, and to differentiate you have to
innovate!”
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4. A legacy of innovation
In the UK we have historically been great at coming up with
ideas, but not so great at exploiting them! This has almost
become a truism where businessmen talk wistfully about
opportunities missed! Despite the wealth of scientific and
management expertise in this country we are lagging further
and further behind other nations in the innovation stakes. We
have an economy and tax structure which is broadly
encouraging of new companies and businesses yet we are not
making the most of our opportunities.
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5. Innovation and Planning
As with all other core business processes
innovation needs to be linked to strategy and the
business planning process. Innovation separate to
business strategy runs the risk of diverting key
resources and damaging the focus of an
organisation. This ‘missile looking for a target’
syndrome must be avoided at all costs. Innovation
activities MUST be driven by strategy and current
business imperatives.
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6. The Innovation
Pipeline
Once innovation, as a
concept, as been accepted
at a strategic level; the
practical implications of
having an integrated
innovation process or
system have to be
addressed. An effective
starting point is to
understand from where
innovations originate and
how they can be collated
and screened. 6, 2012
Saturday, October By Dr.Rajesh Patel 6
Innovations

7. Innovations and ideas can come from any part of an
organisation. It is not the preserve of the R&D
department or Marketing. Nor is it merely limited to
an employee or customer ‘suggestion scheme’. The
green cells represent sources internal to the
organisation, blue external and red via third parties.
The sources of innovation are many and varied but
they need to be collated, coordinated and managed
as a source of valuable information and are core to
the future of an innovative business.
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8. A successful innovation culture embraces all aspects of a business
and should be managed as effectively and efficiently as any other
core business process. To that end, successful innovation companies
operate an ‘Innovation Hub’ where all ideas and innovations are
collated and coordinated. Creative processes and analysis can be
used to stimulate new ideas in four basic areas:
 Business Innovation – new business or supply chain models, for
example
 Product or service Innovation – new or modified products or
ways of providing a service
 Market Innovation – opening a new market or creating a new
customer base
 Process Innovation – improving or changing internal processes
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9. Ideas should be effectively screened and ‘bad’ ideas killed off quickly but
sympathetically. The number and type of ideas will be determined by the
‘performance gap’ and available resources. Many organisations find that an effective
screening or filtering process prevents ‘innovation overload’ whereby a company is
almost paralysed by the sheer volume of innovations and ideas generated from the
multiplicity of sources previously mentioned. If new ideas and innovations are to make
a difference, they must satisfy five basic criteria captured in the V-SAFETM screening
process:
 Value – does the idea deliver tangible benefits to the organisation? This questions
helps eliminate those ideas and innovations that are good in principle but add little or
no value to the bottom line, now or in the future. ‘Tangible’ means that
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10. proponents of the idea or innovation will have to estimate or calculate the specific
benefits that will arise.
 Suitable – is it consistent with strategy and the current situation? This helps eliminate
those ideas that are potential distractions and move the business needlessly away from
its core business focus. If an idea or innovation is not ‘suitable’ it still may have value,
but in other ways – such as outsourcing it under licence to third parties or even spinning
it off as a separate product within a separate business entity!
 Acceptable – will all stakeholders support it? Often innovations fail in large companies
because of the ‘not invented here’ syndrome. It is crucial that proponents of an idea or
innovation spend time and effort on selling the idea internally and gauging the level of
support for it. This is often overlooked and failures are often attributed to ‘office politics’.
Stakeholders are an internal barrier that must be negotiated as if they were a formal
process.
 Feasible – are there sufficient resources and time? Can the innovation be managed
within existing budgets or will additional funding be required? Do new skills need to be
acquired to implement this idea effectively? The answers to these questions will affect
the timeline for implementation and the potential return on investment calculation. It is
often seen as a reality check.
 Enduring – will the idea deliver value in both the long and short term? If a new idea or
innovation is to be truly strategic will it survive the rigours of time? Is the long term gain
worth the short term pain of bringing a new idea to market? Again this highlights the
return on the investment to be made.
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12. The Innovation Process Innovation should be built into
business routines at three distinct levels – at the Annual
Business Planning (ABP) process, through structured ‘themed’
Quarterly Innovation Workshops (QIWs), and ad hoc day to day
activities. Some of the routines are ‘proactive’ by nature – a
conscious focus on bringing ideas and concepts forward into the
innovation process – such as ABP meetings and QIWs. Some
routines are ‘passive’ or ‘reactive’, such as creating a culture of
innovation where day to day activities and management seek to
enable innovations to flourish. In all cases ideas and
innovations should be driven by market, customer or competitor
insights (MCIs) and progress reviewed on a monthly basis. A
robust project management process is often a prerequisite for
effective implementation and communication.
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13. There are a few critical success factors when installing and
running an innovation process within any organisation:
 A focus on opportunities of high value – and lesser ideas are discarded quickly.
This is done through a robust and widely known filtering process using the V-SAFE
process, or similar.
 Active commitment of top management – through visible leadership and use of the
process by senior management. As soon as an ‘informal’ process to fast track ideas
from senior management is used the innovation process breaks down.
 Build techniques into business processes – the most successful innovation
cultures are those where the core innovation process is as natural as all other business
processes such as budgeting and planning. Easy to state – difficult to do!
 Develop innovation as a core skill – in all staff and especially in managers! It can be
done and managers can be encouraged to put forward their and their staff’s ideas.
Thinking innovatively is a skill that can be acquired.
 Tools to support the application of concepts – using the internet and some
tracking software ideas can be tracked and innovations planned. You would not think of
running any other core business process without a tool or system of some sort – so why
should innovation be different?
 Reward people for sharing ideas & knowledge – and this does not just mean a
cash bonus! Performance can be improved through good management and a reward
system that recognises group effort and sharing ideas rather than just the individual.
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15. The Innovation Platform
Like all other core processes, innovation is best managed through
some sort of platform or application. A web-based tool should be
available anywhere, anytime and should be quick and easy to use.
Innovation tools can be thought of as two distinct types; an
electronic suggestion scheme (ideas tracker) and a management
system controlling the overall innovation process – from ‘ideas to
implementation’. Any innovation management system must give
senior management visibility and control over the innovation
process and confidence that best practice tools and techniques
are being used appropriately and applied consistently across the
organisation. Any platform should facilitate effective cross
functional learning as a core feature.
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16. Innovation and People
Research has indicated that one of the most important factors in installing an
innovation culture within any company is having leaders and teams with ability
and commitment. Senior managers need to understand the strategic direction and
how innovation can help. They also need to be able to motivate others. Creating a
culture of continuous innovation requires leadership and commitment from the
Board and senior management teams (SMTs). This is a ‘must’ – a necessary
prerequisite for success. It also requires agents of innovation and innovation teams
across the organisation, champions who will assist a project manager with the
implementation and tracking of ideas, innovations and changes. Managers need to
constantly look at their part of the business and ask themselves “what are the
barriers to being innovative and creative?” They need to ask themselves and others
questions, such as:
 Is anybody being asked about their ideas?
 Do staff know about the need for ideas and innovation?
 Are people rewarded for their ideas and contributions?
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17. Innovation and Performance
Finally, like any other core
discipline, creating an innovation
process and installing an
innovation culture must be
managed and measured on an
ongoing basis. Monthly and
weekly meetings should focus on
the progress and performance of
both new ideas and the
implementation projects. Issues
should have a process by which
they are escalated and associated
risks managed where appropriate.
The performance of the innovation
process and the issues raised
should drive and inform the next
planning process and review of
strategy. Performance has to be
linked to strategy and measures
and key performance indicators
(KPIs) set. October 6, 2012
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The

18. The Integrated
Innovation
Framework
If innovation, therefore, is a core
business process and discipline vital
to the success and growth of
businesses and organisations in the
21st century, companies should adopt
an integrated approach to managing
innovation. The alternative is a
piecemeal approach which has less
chance of generating the returns
expected and required by business.
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20. In the 21st century, in a global economy, there
should be a Chief Innovation Officer or Director of
Ideas who should lead and manage the innovations
process within a business. For large organisations
this would be an indicator of whether a business is
truly innovative and has taken an innovation
culture.
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